Leadership style is one of the most researched business management topics. How a manager leads the people within his sphere of influence can make the difference between a highly satisfactory and profitable company and a miserable unprofitable work environment. When hiring employees, core competencies and skills are always at the top of a hiring professional's checklist. But when hiring managers who will lead organizations, more important than his core skills are a candidate's abilities to lead others. Management styles are described by a number of indices and matrixes. Most leadership guides identified three or four types of leaders, commonly referred to as transformational or charismatic leaders, transactional leaders, Laisse Faire leaders and country club or social leaders. A comprehensive list which identifies 10 overlapping leadership styles is found at Mind Tools.
The idea of a psychological contract which exists between an employer and his employees exists in any society where workers are free to pick their employer. Most employees choose an employer for reasons extending beyond their financial compensation. Additionally, the reason one employee works for a particular employer may be different from the emotional or psychological contract a second employee has made with the same company. A level of expectation exists between the employer and employee, and if the employer fails to meet the employee's expectations, the employee is more likely to search for a new job. For the organization to retain employee's services, and thus reduce the high cost of turnovers, the organization must evaluate these emotional, or psychological contracts and negotiate them successfully with their workers. In other words, the worker and the organization assume a debt upon entering the relationship. If this debt is not paid, to the reasonable expectation of either party, either are free to find staff/employment elsewhere.
Organizational commitment is a topic closely related to employees and employers psychological contracts. Employees often choose an organization, and remain committed to the organization because of a strong belief in and acceptance of the organization's goals and values; a willingness to exert considerable effort on behalf of the organization or a strong desire to maintain membership in the organization. In other words, an employee becomes emotionally attached and remains committed to an organization when he perceives a congruence between his goals and those of the organization.
The only thing that stays the same in any business organization is change. Businesses which refuse to change are quickly outpaced by their competition and risk becoming unprofitable. In the 1980s, the Chrysler-American Motors Corporation landed in this position, as did retailer K-mart in the early 2000s. However, changing an organization's culture and behavior is a complicated process. Organizations become fixed, rigid in their behavior and daily activity. Changing an organization's behavior or culture requires unfreezing the corporation's identity before new initiatives can effectively transform the company. This process was first described by Karl Lewin, whose work in the 1950s is considered the cornerstone of consulting and organizational behavior.